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The Right Price for a Retail Merchant
Account
Next on our list of factors to consider is price. You
certainly don't want to pay too much for a retail merchant account. Sure
providers have to make a living, but some nickel and dime merchants to
death. This is simply unacceptable.
Here are the common rates and fees associated with a
retail merchant account:
|
Fee Type |
Price |
| Application/Setup: |
$0 - $100 |
| Swipe Terminal
Hardware: |
$300 and up |
| Discount Rate: |
1.70% to 1.85% |
| Transaction Fee: |
$0.20 to $0.25 |
| Monthly Minimum: |
$0 - $25/month |
| Statement Fee: |
$0 - $15/month |
| Programming Fee: |
$0 - $100 (only applies
when moving from one provider to another) |
| Daily Close-out Fee: |
$0 - $0.15/day |
| Chargeback Fee: |
$5 - $25/per instance |
| Annual Fee: |
$0 - $100/year |
*A reserve may be required, this is where a merchant
account provider will hold onto some of your earnings to cover costs of
chargebacks. A reserve usually applies to high risk, high volume and
non-US based businesses. A reserve will vary, ask the provider for
details.
I highly recommend
Thompson Merchant Services
for a retail merchant account. They offer the lowest rates I've
ever seen. I can personally say I know them very well and have used them
as my merchant account provider since November 2001. I couldn't recommend
them any higher.
Here are some questions to ask merchant account providers
in regards to pricing:
Some merchant account providers will try to give you
really super rates up front, then as the months go by they'll slowly
increase your processing fees. Make sure rates are fixed and not
introductory.
Make sure their paperwork shows ALL rates and fees you
will have to pay. They should never keep this information from you, ever.
Almost all providers have hidden fees, some don't (like
the company who set me up,
Thompson Merchant Services,
they showed all rates on their site). Again, make sure those fees not
mentioned on their website are shown in their agreement.
If the provider is more interested in your business,
rather then themselves, they won't impose a cancellation fee. However,
not every company sees it that way. Look over their agreement
carefully and ask
them (to be on the safe side).
A reserve is when a provider will hold on to part of your
credit card earnings each month, and eventually release them to you later. This
should be avoided if at all possible.
Top Notch Customer Service is Paramount
Don't get carried away by great rates and then forget about
customer service. Customer service is king for long-term success and
smooth transaction processing. You don't want to be plagued with busy
signals and long hold times. Your time is valuable and downtime will cost
you money.
Before signing up with a company, try out their customer
service number. Give it a ring and ask them a few questions. Take note
of their attitude, do they seem interested in wanting to help you? Are
their answers fully-detailed, yet easy to understand?
Some criteria that should be met for superior customer
service:
-
24/7 availability (and yes, even on holidays too, if
possible. Definitely, if your business operates 365 days a year.)
-
Hold time 5 minutes or less
-
Friendly, courteous representatives who are
knowledgeable
-
Toll-free number
One last note before we move on, don't get conned by
providers who say the reason they charge high rates is because of the
superior customer support they give. Sure, that might account for a
slight price increase, but don't let them go overboard.
Customer service is important, but shouldn't cost you hundreds more than
with another provider. This type of scam is just so they can fill-up
their pockets more.
Requirements for getting a Retail Merchant Account
Now that we have covered the three most important factors in
choosing a merchant account provider, let's look at what you'll need in
order to expedite the process of getting your application approved.
Having this information handy will help considerably:
Go To Next Page:
Choosing a Credit Card Swipe
Terminal
Retail Merchant
Accounts & POS Swipe Terminal Guide (page 3 of 6)
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